Can Brands Go Upscale?
A recent post on a blog called "Branding Strategy Insider" argues that it’s impossible for companies to go "upscale" (and mentions Zale.)
This is becoming a big issue for our industry. Chains (yes, including Zale) are looking into going upscale to avoid getting in price wars with Wal Mart. And independents are trying to go upscale to avoid competing with chains, Blue Nile, and the rest.
I will agree that, as with most things in life, going uphill is harder than going down. But I think it can be done. I would consider Kay an example of a jeweler that has much better consumer and trade perception today than when I started in this business.
I’ve also seen it happen. My old neighborhood — the East Village — used to have a number of very quaint Eastern European diners. As the neighborhood gradually gentrified, you began to see these diners get transformed. They got face-lifts to look more modern. They began adding "funkier" menus. They sent out a different message, to meet the changing clientele. Sometimes they would serve the same food, just charge extra for it. After all, they were now not just diners. They were coffee shops.
So I do think it is possible … however, it requires more than just putting better merchandise in the same cases. It involves giving stores face-lifts, sending out a different message — essentially re-branding yourself, letting people know "this isn’t your father’s jewelry store." Which isn’t easy. But I’m not sure it can’t be done.
Hedda Schupak commented:
A brand has to be willing to commit to the strategy for the long
term--decades, even--and be willing to endure the short-term pain.
If not, it ends up schizophrenic, standing for nothing, and failing
all its customers. I offer as an example the late Strawbridge &
Clothier, one of Philadelphia's strongest homegrown department
stores. A better-middle brand (competing roughly in the
Macy's-level space), the retailer decided to move upscale. But
upscale customers didn't associate the Strawbridge & CLothier
name with upscale shopping, and thus didn't respond quickly.
Meanwhile, the retailer's pricey new merchandise alienated its
solid middle-class customer base. After a few years of caroming
back and forth with different messages, the family ultimately sold
out to the May Co., which rechristened the store as just
"Strawbridge's," tried to promote value. But by then the loyal
value-driven base had gone elsewhere. The strategy failed, and the
name disappeared into the great retail graveyard.
Homer commented:
Honestly, I haven't been out of college *that* long, and I've still
lost count of the number of times I've seen vendors do things that
were hitherto considered impossible. Ten years ago, people would
have told you it was impossible to sell diamonds over the internet
because customers needed the hand-holding and the diamonds right in
front of them. Then Blue Nile, Pricescope, et al. turned the whole
industry upside down almost overnight. The post is correct that
moving is hard, but impossible? Come on, nowadays, I'm firmly
convinced that NOTHING is impossible in marketing; it's just about
finding the right approach. MJB has an excellent example with Kay.
They're not Tiffany, but they've successfully pulled a "Target" on
Zale's Wal-Mart approach.
Mall Jewelry Boy commented:
Sterling very slowly changed Kay's merchandise through their "pull"
method of merchandising. While Zale "pushed" higher quality and
trendier jewelry on all of their customers in all of their stores,
Sterling gradually tested merchandise and responded to consumer
demand. It's much slower and less dramatic than "push"
merchandising, and won't have the amazing results a successful push
might cause in regards to sales, but it's much safer. Zale was
overconfident as their "push" merchandising pulled Gordon's from
low-end to middle market (just above Zales in pricing) and boosted
the chain's average ticket much higher; they hadn't realized how
consumers would react to "The Diamond Store" suddenly changing. Of
course Sterling also built up Kay through intense marketing and
store refurbishment...and by combining the strength of the original
Sterling regional brands. When I think about re-branding, I think
about Target, a place I used to hate shopping at because it was
always cluttered and understocked. Now I am much more likely to
shop at Target and no longer dislike going there. But it has taken
me years and years of not shopping at Target to finally go back.
"Upping" a brand is a lot of hard work, and will often cause a lot
of pain in the short term, but it is sometimes possible if you go
slowly.
